Bathurst Resources Limited

Coming along to the quarter three FY25 update. Hopefully you can see this on the screen. I'll be running through the presentation that was released today. Just using that as a guide, really, the key thing. This will really let you know what we're up to with the projects as much as anything else. So... Standard disclaimers. uh we're as of um yesterday we had a 72 cents share price about 173 million a market cap uh enterprise value is up a little bit at 21 australian dollars obviously on the back of the capital raise that was successfully done you know the end of march into april Thanks very much for the people that backed into that, the combination of the placement and the SPP, realising that there was probably some people were seeing value in the SPP being it pretty much par when we kicked it off. But, you know, having done the placement at 74 cents, we believed it was the right thing to do for all shareholders to offer that opportunity to others. But obviously it's not a large discount, so it may not have been attractive to some. but it really has set us up now to take forward the projects that we'll discuss more as we go further forward today. It fits very much in with our standard strategy. We've got good profitable operations, both 100% owned by Bathurst, but also through the BT Mining Joint Venture with Stockton, Maramuru and Rotowara. You know, we've got growth projects that are associated with each of those, but we've also got projects that are outside of that, which are 100% owned by Bathurst. that are going to add to a larger overall tonnage of coking coal being sold in the international market and generating incremental free cash for Bathurst. And then part of that is then looking at returning free cash back to shareholders, both in the form of dividends but also in the form of growth. So looking at using some of that cash to then go forward with further developments as they come forward, including the Crown Mountain project, which is a little bit further down the track. So just turning our mind to our main cash generation at the present time, we've got, obviously, the BT Mining assets with Rotowara, Mumara, Stockton, and then our 100% asset in Takatimu. So just a quick overview, really just on the quarter. Rotowara, we're slightly down on overburden removal, but we have been mining in a block that was additional tonnage, so we're... about 200,000 tonnes up in terms of the modelled coal, and we've actually had positive reconciliations against that as well. So our sales plan is actually in front, but we are behind by about a million BCN for the year to date, for the nine months. At Marlborough, we're actually in front of both. We're in front of both burden and coal. Eddard generation is in line with forecast. Stockton, we're in front of OB, and we're actually picking up quite a bit of the tons that we lost through the first six months that has been deferred in the second six months. That has allowed us to really make a few additional sales. We're about 40,000 tons in front of where we thought we were going to be for the end of quarter three, which is pleasing. The rail system has been operating well. Very few delays. So, again, we are sort of managing to book in more ships and meet those challenges. So, you can see we've been performing well. They're in front on ABN toll. We're a little bit behind on EBITDA with some of the low-price contracts. So, really, looking, you know, where we've been and where we're heading to, we've had, obviously, a drop-off over the years from the... what we call the domestic coal or process heat coal, coming mainly from our domestic markets in the South Island and also in the North Island, even with the joint venture. You know, we were supplying a lot larger tonnage to dairy, for instance, which in the North Island is pretty much curtailed now. And we are seeing a drop off to those markets in the South Island as well. So as we've already projected to the market, Takatima will close in FY27. which is sad, but really that market is no longer there to support the future developments. Domestic steelmaking, though, is still looking to be strong. We're still going to be in that 400,000 to 500,000 tonnes a year market. And obviously with export coal, we're looking to maintain around about the 1.1 to 1.2 million tonnes going further forward. So that has been our business really since taking over the joint venture, well, formerly the joint venture back in FY17. And, you know, what we've seen is we've always been profitable. So we've always generated good levels of EBITDA in particular over those years. Obviously, we've had a swing at different years between contribution from export and the contribution from the domestic business. But predominantly, you know, our export is clearly driven by the earnings that are from hard coking coal benchmark pricing. which we don't control, but obviously we do control our costs. And, you know, you can clearly see that with the EBITDA generation versus the international coal price and the red line on the graph. We will see an increase over the next couple of years in the EBITDA generation out of domestic business, even with Takatumi dropping off. We're in a growth phase now at Malmo and Rotowara. We have been for the last couple of years, as we've seen, you know, from the reduction and the contribution from them. But we will see that increase back out to levels from around about FY20, as we were aiming to be. Now, we're a large contributor. We're a medium-sized business within New Zealand. Direct employees, that's 675. On top of that, uh you know a couple hundred contractors at various times across the operations we do own and operate all of the equipment on each of our sites but we do have additional mining contractors plus contractors and specialist areas so we employ about 950 odd people directly through employees and contractors obviously in the employees about 90 million going into the economy These numbers are the audited numbers at the end of June last year, but they haven't changed much this year. About $66 million to the government and about $240 million paid for services, mainly supplying diesel, bomb and other parts into the business. So to record, Not great. We've had a lot of relatively minor injuries, though, that have then required further treatment off-site. So, again, our loss of injury frequency rate and our total equivalent of injury frequency rate are not great. We've been concentrating a lot on the critical risk management side of the business. So, you know, risks that could lead to fatalities and then looking at the controls that will prevent that And also, you know, bringing our management teams forward as well and, you know, concentrating a lot also on training. We've got a lot of recruitment with the growth projects in Murramurua and Rotorua, and also, of course, we're replacing people as they retire out of Stockton. So, you know, we've had a higher influx of new employees, which has really put stress on their training systems. You know, consolidated revenue, just under $200 million. EBITDA, about $40 million, which is really in line with where we thought we were going to be. we've got $165 million consolidated cash between the joint venture and BAPIS 100%, and within BAPIS 100% owned business, after the capital raise, we've got about $40 million between restricted and free cash. International cold price has been relatively stable, but obviously at lower levels than what we've seen over the last few years. So we've bottomed out around about $170 million, million at the end of March. We are seeing the curve, though, still in contango. We're still seeing our prices going out to about $200 by the end of this calendar year. And then we're looking to go further higher than that in the next calendar year based around that's the forward curve coming out of the Singapore market mainly. But also indications are that there's no new supply coming into the market. We have seen China has always been the major importer and the major controller of the seaborne trade. India has taken over some more of that, but we are seeing sort of reconciliations and tonnage out of Russia in particular that was going into Europe is now going into India. And then obviously the other overlay on top of that is the you know, situation with the US with tariffs and how that's all going to settle out. So at the moment, we are still hedging a certain percentage of our forward sales up to a maximum of 40% with any quarter. So we hedge about a third of our future sales and locking in the dollar against the New Zealand versus the American, the US currency at the same time. So, you know, that's sort of played us in good stead up till now. Obviously, we haven't got any debt within the business, so we're not trying to lock in downside. It's really trying to lock in profits further out as we see the opportunities, and there's only small tonnages available in this market, so we lock them in on a book-null basis. We're still anticipating that our guidance between $45 and $55 million for the full year EBITDA basis, that's at that list consolidated, Obviously, exports down quite a bit from last year with pricing and also the disruption from the tunnel collapsed earlier in the first half of the year, taking out some of the capacity. We are going to see a slight deterioration in Ebb and Barrier, the North Island and South Island over the full year, and also with Telcra, now that we're going through the environmental assessment application process, there's more money going in there. Right, the really exciting part, obviously, you know, we did the capital raise and it was well supported, raised $34 million. And the real reason for the raise was developing these two projects, taking them through the consenting process, taking them through the PFS, DFS to get to the stage where we can get the first coal in FY27, FY28. So that's the intention. You know, both these projects are... but they are quite different. So Buller is definitely a brownfield site. It's a well-known coal resource. We've had the bulk of these assets in 2010. It's been well-drilled and well-explored and well-planned now. But the last project is Greenfields. There's no other coal mining in the area. It's got close proximity to rail. We've got control over the land with a rail. We've got control over the land with a haul road. and we're working through the process now getting the various other approvals and conceding that are required so with the bullet project we'll be utilizing the fast track approval process that was um put into into enacted in december last year there's a couple of projects that have actually not by us but by other companies that are starting to go through that now so we're getting some experience out of that but you know this is a project that's going to Coming to full production around FY28, we've got an initial startup capital of about $50 million New Zealand dollars, and we're ultimately going to build up to about 850,000 tons a year, and it's going to mine life of more than 13 years, utilizing the existing stock to the infrastructure. Probably just looking at that a little bit more in depth. What we're talking about with the Buller project is actually a combination of the print venture asset, and then the 100% owned Bathurst assets. So Stockton itself has probably got three or four more years of reserve within the existing holdings, but it contains the infrastructure hub. We've got the rail, we've got the wash plant, we've got the aerial, we've got the rail layout facility, and we've got access to the market. So as the tonnage drops off within Stockton, we then progressively bring in more and more tonnage, which is the purple bars on the... they graphed here depicted, and then building up pretty much to be around about, as I said, 850,000 tonnes average per year after about FY32. So that maximises the benefit for the joint venture in that we mine and sell all the remaining coal within it, and that colony is Glen Partners. As anyone that's followed the progress of Stockton in particular, Stockton mines up to about three or four pits at any point in time, and each boat goes out as a blend of each of those pits. And there's different coal qualities even though it's quite a small area to make up a number of different sales blends that go into the market. So we maximise the recovery as in the dollars from those coal pits by maximising the qualities of each of those shipments. So adding that boiler coal into it over the next few years is going to maximise the recovery of coal out of that overall complex. So in terms of timelines, we're looking to submit the application to the fast rep process in quarter one FY26, so July, August next year, this year, sorry. And we're looking to be out of that process by January, February next year in terms of calendar year, so during FY26. We're progressing a pre-feasibility study. We've had a number of parts of this that have been under study for a long time, but now that we've sort of got the consolidated project that we just depicted on the slide before, we can now actually come up with some consolidated numbers across that at a pre-feasibility level, and then we're also, as part of that, working on a DFS that'll lead to a bankable feasibility study at the end of it. We've got some work that we can do in the meantime on the site access rate upgrades and things like that, but really the key work will start once we've actually got the FastTrack approval. And as we'll discuss in the next slide, the FastTrack is very much a one application, multiple approvals. So when we come out of that, we'll actually have all the things that are required to go mining. At the same time, we are, as part of the DFS process in particular, we're looking to try and bring forward first coal and actually, you know, coal production overall in the Bullock into FY27. We've got some work going on at the moment that's looking very positive. At the moment, we've reported FY28, but we are looking to bring it forward. And then, obviously, there's some key civil constructions around the coal transport route with the haul road construction, and then once that's completed, bringing on the coal fleet. So we're the fast track, as we said, enacted in December 24. Another key thing for us in terms of that, but also our relationship with government, is that metallurgical coal, which is our main product, actually was added to the New Zealand critical minerals list. And we are seeing that occurring on other jurisdictions across the world. Europe, for instance, the U.S. just recently with an order from President Trump, But really the fast track allows, you know, the list of projects, which we are the fuller project is listed in the Act, you know, to go through with some very strict statutory timeframes. I suppose with those statutory timeframes, you know, being so strict, it means that we've got to put in a very good application that doesn't require a lot of backwards and forwards, a lot of further work to carry on with it. So that's why we're anticipating, you know, it's going to take us another couple of months to get to that stage. and we'll be then looking to try and get that in July this year. I won't go through all those timeframes, but as you can see, most of the government departments that are going to be dealing with us and the panel, that'll be convened once we get completion. Once they have 15 days to sign off on at the moment. I don't know of any projects that have actually got through that completion phase, so that seems to be a... a key step in the chain, and then it sets off a whole series of very fast turnaround discussion points and decision points, which then finally leads to a decision by the panel after about three or four months. So moving on to Talpa, as I said, Greenfields project, it's in mid-BC, right beside the main roller line that brings the bulk of the coal from the Tumble Ridge area over to the port of Ridley. There's ample capacity at Ridley as well. We're aiming here for about 750,000 tonnes a year for about a 20-year period. So it's a good long line. Looking at a spend of about 75 million Canadian. That's based on the existing PFS. We're updating that at the present time. You know, good yield of a semi-soft coking coal product. So it'll go into very similar markets that we're already supplying you know, South Korea, Japan, some coal into India and also China. So, again, you know, we've got close proximity to the rail line. We're 320 kilometres from that port, which will be the closest port... closest line to a port in the whole of BC. And, again, there's ample capacity within that port. But where we are at the present time with that, with the environmental process, is that we have come out of the application development review phase. We've got a number of requests for information that we're working our way through. We're anticipating that's going to be completed by September, and then we'll be ready to put our effects assessment in for basically final vetting, and then hopefully recommendation and decision making. So again, once we enter that phase, we enter some really tight timeframes, the 150 days and the 30 days. There's very little activity that will quite stop the clock, whereas the phase before that we've just come out of, basically every time there's a question, the clock stops and you answer the question, then you go back. So the main phase really through the effects assessment is consultation with the parties, that's the regulators in particular, across the various groupings, looking at the effects of the business and also the community and First Nations. So one of our goals with this is to go into that process with an affirmative response from First Nations and we're working very hard towards that as we speak. So what we're aiming to do is really then build a business that at this level is delivering about 2.5 million tonnes of coking coal to the market for about another 15 years. So, you know, long-life projects with Tenas in particular and then Overlane, Crown Mountain, which is not shown on there as well, and then also building on the existing assets within the North Island and the South Island through the joint venture and adding our, you know, 100% owned tunnels to that joint venture tunnel as well as we've already seen in the graph before. So where does it leave us now? We're sitting, again, you know, we've got a market cap of 173, but, you know, we've got an asset backing... of 64 cents and we've got an asset backing of about $1.64. So in anyone's mind we are undervalued, we've got no debt and we've got good cash generating capacity within the existing operations without bringing on these other projects. who then overload these other projects, as we've just seen, and we're going to triple the opportunity to make cash out of this business. So, you know, again, we've got profitable operations within the joint venture and 100% owned takatimi mine. The capital raise has been successful, which then allows us to take forward that work that I've just depicted through the fast track, but also the British Columbian EAO process or Environmental Assessment Office process and ultimately into mine permitting over there. We've got good cash reserves still within the joint venture. Actually, you know, it's $190 million, which we own 65% of. So the joint venture itself is fully funded. We've got the fast track application is fast progressing, ready to go. We've got good backing from the government through the fast track. Plus, you know, the fact that metallurgy coal has been added to the list. They are very keen to see this economic development. You know, we are a major employer in the West Coast and on the North Island. They want to see these projects continue on because that's, you know, it's, injection of, as we saw before, $80-odd million in wages alone into these areas adds up to a hell of a lot of economic development going outside of just our business. So, you know, we are progressing the environmental approvals and the DFS for the Tamas project, and we're looking to be able to update you later in the, in the, sorry, early in the new financial year with the updates on those. So thank you for attendance. If you've got any further questions, you can submit those through the website link or through the supplied email. And look, I'm more than happy to take feedback as well, as well as questions. So thanks very much for your attendance. Look forward to catching up with you again soon. Thank you.